Transfer pricing

Due to the rapid development of globalization and integration processes, transfer pricing (TP) remains an extremely relevant topic that touches upon many important aspects. Since 2013, the Ukrainian tax authorities have significantly increased their focus on cross-border transactions with related parties and have already started conducting TP audits. Compliance with the TP rules involves a significant administrative burden for taxpayers. Our team of transfer pricing experts is ready to assist you in managing transfer pricing risks and identifying possible ways to make your business more tax efficient.

To comply with the requirements of transfer pricing legislation, businesses need to:

  • organize processes for collecting and processing price information;
  • check the compliance of prices of controlled transactions with the market level;
  • prepare and submit all necessary documentation to the tax authorities within the established timeframe;
  • plan their business processes based on the results of the above work.

The best way to solve such problems is to create a transfer pricing methodology, efficient business processes and organizational structure for compliance with transfer pricing legislation, as well as timely and thorough preparation of transfer pricing documentation justifying the pricing policy.

We offer our clients assistance in substantiating transfer prices, preparing reports on controlled transactions, support in communications with tax authorities and solving other transfer pricing-related tasks.

How we can help

1. Compliance

  • running a diagnostic on the Group’s existing controlled transactions from the perspective of the TP legislation;
  • assisting in preparation of the TP documentation to substantiate the arm’s length level of prices applied;
  • performing benchmarking studies to determine the arm’s length profitability;
  • assisting in preparation of the report on controlled transactions

2. Planning and TP policy development

  • developing a unified methodology for determining prices in controlled transactions;
  • providing recommendations on improvements to pricing policies, in particular, by value chain transformation;
  • developing and assisting in the creation of trading and procurement structures;
  • assisting in structuring of year-end compensatory adjustments.

3. TP audits and dispute resolution

  • assisting during the whole process of a tax authorities’ TP audit, including responses to the official requests, supporting in interviews, etc;
  • providing tax and legal support during the TP litigation process

4. Advice on TP matters

  • providing advice on various TP matters.

5. Advance Pricing Agreement

  • preparing necessary documentation for entering a procedure;
  • supporting during the negotiation process, including economic analysis, responses to tax authorities’ requests, etc;
  • participating in discussions with the tax authorities (including the pre-consideration stage)

6. Development of TP business processes

  • developing business processes for setting and monitoring prices in controlled transactions;
  • developing and describing business processes and algorithms for collection, analysis and classification of the controlled transactions, for calculation of the arm’s length price, and for preparation of the reporting documentation;
  • developing and describing the functional and technical requirements, as well as the algorithm of the information system functioning, including requirements for key data sources, the reference structure, etc.
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